Markit : July Flash Manufacturing PMI Rises To Four-Month High

By Johanna Bennett

The U.S. flash manufacturing purchasing managers’ index hit its highest level in four months, rising to a 53.2 reading in July from 51.9 in June, Markit said Wednesday.

Of particular note: New orders and employment increased. And Chris Williamson, chief economist at Markit, notes that because the goods-producing sector is a bellwether for the wider economy, the upturn in July bodes well for a third-quarter pickup in the pace of economic growth.

Still, hecautions, things are not as good as they could be. Williamson writes…

The pace of manufacturing growth nevertheless remains well below that seen at the start of the year, in part reflecting weaker demand from many export markets, notably China and other emerging economies. Employment growth is disappointingly weak as a result, as firm focus on cost-cutting to boost competitiveness. The Fed will therefore be encouraged by signs that the sector is showing signs of reviving, but will no doubt remain cautious with regard to the longer-term outlook for the economy and the job market. It is likely that policymakers will generally need to see growth strengthen further before sounding more confident about the ability of the economy to withstand any tapering of stimulus.

The Markit index is similar in design to the Institute for Supply Management manufacturing index, which will be released in one week. The Markit index has been higher than the ISM factory index in 22 of the past 24 months. The last reading for the ISM index was 50.9

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